SDG&E’s 2021 Combined Heat and Power RFO Bidders’ Conference

SDG&E’s 2021 Combined Heat and Power RFO Bidders’ Conference December 16, 2021 1

Agenda 1. Welcome and Agenda 2. Procedures and Legal Disclaimers 3. Supplier Diversity 4. Independent Evaluator 5. Solicitation Overview 6. Bidding Process 7. Offer Submission Process 8. Bid Evaluation 9. Questions and Answer 2

Logistics Audio - Microphones will be on mute for all participants for the duration of the webinar Procedure for Questions Please hold questions until Q&A section of the conference. - Questions can also be emailed to [email protected] and MUST also CC SDGE [email protected]. Questions will be addressed either o At the end of the webinar or o In the FAQ document available on the RFO website: http://www.sdge.com/2021CHPRFO. 3

Anti-Trust and Document Conflict Legal 4

Legal Disclaimer: Anti-Trust Guidelines & Document Conflict Anti-trust: All participants in today’s meeting shall comply with anti-trust guidelines. These guidelines direct meeting participants to avoid discussions of topics or behavior that would result in anti-competitive behavior, including restraint of trade and conspiracy to create unfair or deceptive business practices or discrimination, allocation of production, imposition of boycotts and exclusive dealing arrangements. Document Conflict: This presentation is intended to be a summary level discussion of the information and requirements established in the RFO documentation. To the extent that there are any inconsistencies between the information provided in this presentation and the requirements in the RFO documentation, the RFO documentation shall govern. 5

Supplier Diversity 6

Diverse Business Enterprises (DBE) General Order (GO) 156 History: Adopted by the California Public Utilities Commission in 1986 and with Electric Procurement reporting added in 2012 Purpose: Promote greater competition among utility suppliers by expanding the available supplier base and to encourage greater economic opportunity for women, minority, and disabled veteran owned businesses historically left out of utility procurement Qualitative Metric: In the event of a tie between two offers, SDG&E will consider a Respondent’s status as a DBE and or a Respondent’s plan to utilize the services of DBEs during project development California Public Utilities Commission (CPUC) Supplier Clearinghouse Register to become a DBE supplier, http://www.thesupplierclearinghouse.com/ Questions? SDG&E Supplier Diversity Team Email: [email protected] Phone: 1 (866) 616-5565 7

Independent Evaluator PA Consulting 8

Independent Evaluator Role PA Consulting will be the Independent Evaluators (“IEs”) for this solicitation. PA Consulting has served as the IE for previous SDG&E RFOs (e.g., IRP, reliability, and etc.) The IE oversees the work of SDG&E’s Bid Evaluation Team. The role of the IE is to ensure that SDG&E’s evaluation of offers is transparent and that all bidders are treated fairly and equitably. The IE is expected to assure that affiliate and utility owned offers are not favored over third-party offers. The IE will also ensure that offers meet Commission decision requirements. The IE oversees the modeling of the offers including how each offer is represented the models. The IE provides advice to SDG&E on evaluation issues as they arise. 9

Solicitation Overview 10

Regulatory Background In accordance with Resolution E-5163, D.10-12-035, and D.15-06-028 by the Commission on August 20, 2021, SDG&E is issuing its 2021 CHP RFO to solicit offers from owners and operators of CHP Facilities and Utility Prescheduled Facilities (“UPF”). SDG&E seeks to acquire a total of up to 51 MW of CHP name plate Capacity under Power Purchase Agreements and up to 0.283 MMT of GHG emissions reduction to meets its procurement goals. 11

RFO Eligible Resources Generatin g Facility Facility Vintage CHP Baseload Facility ("CHP") Utility Prescheduled Facility ("UPF") New, Existing, Repowered, Expanded Up to 7 Years for Existing, Repowered and Existing CHP-to-UPF Conversions, and up Maximum to 12 Years for New and Expanded Term meeting Credit requirements PPA Type Nameplat e Delivery CHP Pro Forma PPA CHP UPF PPA Larger than 5 MW Within the CAISO Controlled 12

RFO Schedule NO. ITEM DATE 1. 2. RFO Issued Pre-Bidder’s Conference 3. DEADLINE TO SUBMIT QUESTIONS January 17, 2022 Question submittal cut-off date. Answers to all questions will be posted on the website no later than January 24, 2022 4. CLOSING DATE: Offers must be uploaded to and received by SDG&E’s PowerAdvocate web platform no later than 12:00 PM (Pacific Prevailing Time). 5. 6. 7. SDG&E and IE begin bid evaluation process SHORTLIST NOTIFICATION SDG&E notifies Shortlisted Bidders SHORTLISTED BIDDERS ACCEPTANCE/WITHDRAWAL Letter due from Shortlisted Bidders indicating: a. Withdrawal from SDG&E’s solicitation; OR b. Acceptance of shortlisted standing; withdrawal of participating in any other solicitation and evidence of withdrawal notice to all other solicitors 8. SDG&E issues appreciation notices to unsuccessful Respondents 9. SDG&E commences with PPA negotiations 10. SDG&E submits PPAs to CPUC for approval December 1, 2021 December 16, 2021 January 28, 2022 January 31, 2022 March 31, 2022 10 Days after Shortlist Notification or by April 14, 2022 3 weeks after Shortlisted Bidders accept/withdraw or by May 5, 2022 up to 24 weeks* or by October 20, 2022 4 weeks after PPAs are negotiated and executed or by November 17, 2022 * Negotiation time will vary depending on facility vintage and proposed contract modifications. 13

Bidding Process 14

Required Documents 1. 2. 3. 4. 5. 6. Offer Form Project Description Form CEC-2843 Application Form Electric Interconnection Information Redline of Applicable Agreement Supplier Diversity Information (optional) 15

Offer Submission Process 16

PowerAdvocate Ways to Register: 1.Register as a first-time user on www.PowerAdvocate.com Request for access using the PowerAdvocate link provided in the RFO documents - https://www.poweradvocate.com/pR.do?okey 129106&pubEvent true How to Log On: 1.Launch a web browser and go to: www.poweradvocate.com, and then click on the orange Login button 2.Enter your account Username and Password (both are casesensitive) 3.Click Login 17

Common Mistakes to Avoid Inconsistent contract terms between worksheets or documents - Prices and deliveries should start at the same date as the contract start date. Deliveries and prices should stop in the final contract year. Offer forms for contracts of 12-year terms that only have 10 years of pricing and deliveries, or any other mismatch that is not explained in the offer form, may be declared non-conforming and rejected. Missing documents - Any of the required documents that are not submitted before the RFO closing date could be declared non-conforming. Using incorrect units - Offer form entries that are inconsistent with the units shown at the top of the pricing form column may require corrections. For example: /kW-yr vs. /kW-mo. 18

Bid Evaluation 19

Evaluation Valuation and Selection Process Least-Cost/Best-Fit (LCBF) Conformance Screening & Qualitative Evaluation - Viability - Adherence to PPA terms and conditions Quantitative Evaluation Net Market Value (NMV) Each conforming offer is valued using this discounted cash flow analysis. Shortlisted Offers 20

Quantitative Valuation Process Net Market Value Benefits - Costs Typical Benefits Typical Costs Capacity (RA) Contract Payments Energy GHG Compliance 21

Thank you for attending Questions 22